BY ROBERT P. MADER of CONTRACTOR’s staff
WAILEA, HAWAII — Schedule delays, changes and acceleration are facts of life for new construction contractors, who are often entitled to more money, more time or both as a result. While it might be easy to calculate how much the extra rental on the man-lifts will cost, it’s difficult to quantify how much a schedule change affects labor hours.
If 1,000 man-hours are left in a job, you can’t hire 1,000 workers and get everything done in an hour. Up until now, it was difficult to explain exactly how that happens and put a hard number on the added man-hours caused by schedule compression.
The Sheet Metal and Air Conditioning Contractors’ National Association and the New Horizons Foundation hired Professor Awad S. Hanna from the University of Wisconsin to quantify the impact of schedule compression on productivity. Hanna presented his findings at the SMACNA convention last fall here. Hanna also has worked with both the Mechanical Contractors Association of America and the National Electrical Contractors Association.
Hanna first had to define normal man-hours. Manning ramps up at the beginning of a job, peaks for a while, then declines through the rundown stage. The peak should be no more than 1.9 times the average manning of a job and the lower the better. For example, if the average is 20 men, the peak should be no more than 38. A ratio of 1.6 is ideal.
Graphing those manning levels creates a curve and the area under the curve represents the total man-hours. Hanna said that sheet metal contractors peak early because of the size of equipment and ductwork. Ideally, a sheet metal contractor should peak at 25% of the project duration and at the end of the peak should be 65% complete with his portion of the work. The rundown period should be 55% of project duration.
Hanna discovered that mechanical contractors typically peak at 50% of the job duration and electrical contractors peak at 60%. At 20% of job duration, the mechanical contractor should be 20% complete with his portion.
Hanna said he called construction managers all over the country to get an aggregate of their own labor curves, and they had no idea what he was talking about. Schedule compression changes the labor curve and creates a whole new area under the curve of total man-hours.
He suggested that contractors create a man-hour curve before the job starts and let the GC know that their bid is predicated on those man-hours. He also recommended that contractors track their Delta — total man-hours minus estimated man-hours plus change-order man-hours leaves the Delta, i.e., man-hours that you don’t get paid for. Why? It could indicate a bad estimate, your own bad performance or external factors such as compression.
Contractors, Hanna noted, can handle schedule compression in three ways: overtime, over-manning or shift work. Each has a different effect on productivity.
Overtime is easy, Hanna said. You don’t have coordination or congestion problems, and you can take advantage of good weather, maximize use of equipment and attract good people with the lure of more money.
On the other hand, overtime causes fatigue, attitude problems, increased absenteeism, more injuries, errors and omissions, lower quality and bad pacing. The absenteeism can be particularly troublesome — fatigued workers with a couple of fat overtime checks decide they need some unscheduled time off.
Hanna graphed productivity loss and found that overtime should not exceed 5% of total man-hours. Productivity drops as overtime increases. On one job he studied, he found 50% OT resulted in a 24% drop in productivity.
Hanna also found that four 10-hour days are statistically equivalent to five eight-hour days.
Over-manning may be attempted to limit fatigue, but it causes site congestion. Each worker needs 200 sq. ft. of space to be productive. Over-manning makes coordination more difficult, it dilutes supervision, creates material and tool shortages, brings in new workers who are less productive and kills the learning curve. On jobs that Hanna studied, over-manning caused productivity losses between 10% and 35%, with the worst case being 42%. Overtime, Hanna concluded, is better than over-manning.
Shift work avoids fatigue, there’s less congestion and the premium paid is less than overtime rates. The problem, Hanna said, is the handoff from one shift to another. He found that successful contractors overlapped supervision for each shift by an hour, or else they assigned the shifts different tasks in different locations. Shift work might create fatigue because of disruption of normal sleep patterns. He found shift work is fruitful for up to 5% of total hours but that productivity drops after that, especially if shift work is more than 10% of total hours.